Monday, December 28, 2009

Len, we hardly knew ye

On the day before Christmas, Qualcomm announced that its COO Len Lauer is leaving to become CEO “at another company.” Although his hiring was a big deal three years ago, I didn’t see him quoted a lot during his time as group president and later COO.

I kept waiting for someone to leak what that company is, but no one has said — and he refused to say when the UT asked him Thursday. (My hunch is that the former CEO of Sprint Nextel is not leaving to head a small startup.)

A few things bother me about this announcement. I agree with Sebastian Rupley of GigaOM:
I know companies don’t typically release news a day before Santa’s visit, unless they want to push things under the carpet.
He’s right, but no one is going to brag about losing a top exec and so that part’s understandable.

I’m only slightly bothered that Lauer was one of the troika of leading execs at the Dec. 16 annual Qualcomm “town hall” for the local telecom community — and then 8 days later he’s gone. It’s also curious that the December 2006 press release announcing his appointment has been deleted from the US website (but not the Russian site or the Google cache).

More seriously, one of the things is that we’re seeing the replay of what happens at any big company where there’s no chance of becoming CEO — the most experienced execs are leaving. Then-COO Sanjay Jha in August 2007 left to become Motorola’s handset CEO (when/if it’s spun off).

Yes, it’s a testament to the quality of the people at Qualcomm, the experience they gain and the value that other firms place on that. (Of course Lauer had excellent operating credentials before joining Qualcomm.)

However, when your CEO is 47 and the scion of one of the founding families, it’s obvious that it’s going to be a long, long time before anyone else gets to control the reins. I haven’t seen any evidence that Qualcomm is prepared for its new role of providing executive talent to the rest of the industry.

It would be good if the board were populated with someone who lived through the two decade Jack Welch era at GE, where the company groomed talent and saw them bail out in despair of ever taking the gold ring.

Perhaps some of the GE experience can be used to keep good talent longer. In retrospect, some of the GE CEO wannabes — think Nardelli — turned out to be spectacularly bad CEOs without the GE infrastructure behind them. Qualcomm has a unique position of strength in an industry that still is growing (at least a little), and it may hard to be a huge success in a company or industry that poses more serious challenges. (Exhibit A: Ed Zander.)

There was one other troubling thing about the announcement. With Lauer’s departure, Qualcomm is juggling responsibilities between people to fit the men (they’re all men), just as they did when Lauer was appointed 33 months ago.

I’ve never been an executive in a Fortune 500 company, but it seems to me that the lines of the various divisions should be consistent and not re-juggled based on who’s available this week to run them. On the one hand, QCT head Steve Mollenkopf has the operating experience most relevant to running (as he now will) Qualcomm MEMS Technologies, makers of Mirasol.

On the other hand, will running QCOM’s biggest division cause the QMT growth possibilities to be neglected? And if this was such a good idea, why wasn’t it done earlier? Lauer’s service business were assigned to president Steve Altman, and it appears the top rungs of the executive team also includes Andrew Gilbert Derek Aberle (head of QTL, historically Qualcomm’s most profitable division.)

I’m guessing that another re-assignment of responsibilities will come in the next 12-15 months. Hopefully, that will be as the result of substantial growth from one of Qualcomm’s newer divisions (like QMT or MediaFlo) rather than more juggling to fit the changing personalities in the executive suite.

Updated Dec. 30: As a Qualcomm reader points out, Derek Aberle is head of QTL while Andrew Gilbert is head of Qualcomm Internet Services.

Update: see this report of Len’s new job.

Friday, December 18, 2009

Qualcomm: beyond the cellphone

CEO Paul Jacobs and two of his top executives were on stage Wednesday for the annual San Diego Telecom Council CommNexus “Qualcomm Town Hall”. Deutsche Bank analyst Brian Modoff pitched his own questions, as well as ones texted to him by audience members.

Bruce Bigelow covered the story for Xconomy San Diego. (At the reception beforehand, I chatted with Bruce — we’d never met although I’d traded emails with him when he was at the U-T.)

Bruce’s story focuses on one of the major themes for Qualcomm nowadays, which is the ongoing shift from voice to data. He emphasizes discussion of 4G deployment, although the 4G questions were all about LTE (particularly Verizon’s rollout starting next year) rather than WiMax. And indeed, looking at my notes, 4G/LTE was one of the major topics of the evening.

As Bruce notes, Jacobs noted that the 4G rollout will happen over time. One question relayed by Modoff: analysts are asking was when will there be single mode LTE devices? The answer was that there will be multimode devices as long as analysts have a job on Wall Street — and Jacobs added “hopefully that's not because they have a short career.” Jacobs also talked about limited prospects for improving spectral efficiency with 4G, something he and his dad had discussed in their rare joint keynote at CTIA in October (also held here in San Diego).

Still, in listening to Jacobs talk, I found at least one answer to my longstanding question: how will Paul be different than Irwin?

The short answer: Irwin is about radio and Paul is about mobile computing.

Yes, Irwin was UCSD’s most computing-oriented professor at the APIS department back in the 1960s — to the point that the department chair despaired of losing him when he left on leave in 1971 to take charge of Linkabit. However, Irwin’s publications and influence were as a popularizer and entrepreneur for Shannon theory, including his greatest career accomplishment — turning CDMA into a business.

And certainly Paul has his Berkeley EE PhD and can talk spectral efficiency with the best of them. But his career and his passion seems to be as a device geek, and Wednesday’s session seemed to emphasize that he is taking Qualcomm not just beyond voice, but also beyond the cellphone. (Of course, he was also born into the software/microcoding era, and has fully internalized software-based device design to a degree that perhaps Dad never could).
Indeed, the idea of Qualcomm beyond cellphones was a recurring theme during the executive Q&A. Beyond LTE, two other topics that came up over and over were the Snapdragon chip and the FLO TV 700 Mhz broadcast television service.

Prompted by Modoff, QCT president Steve Mollenkopf kept coming back to Snapdragon over and over again. It’s not clear how clear how successful the Qualcomm ARM cpu/communications chip will be, but it was very clear that pushing Snapdragon is one of Qualcomm’s major strategic thrusts for 2010 as it moves into mobile devices such as “smartbooks”.

Mollenkopf was asked to compare Snapdragon vs. Intel’s Atom. He made it clear that they’re in different niches now, but eventually the two products (and presumably companies) will be directly competing. Indeed, it’s hard to imagine how the Snapdragon smartbook will be distinct from an Atom netbook in 2011 or 2012 — other than the choice of operating system (Android or perhaps Windows CE vs. genuine Windows).

The other non-cellphone device that came up was the Personal TV portable device that Qualcomm is selling to promote use of FLO TV in the US. COO Len Lauer pulled it out more than once — and also mentioned that it was available at Best Buy, Amazon and Radio Shack. His ongoing plugs for the PTV became a sort of running joke for the evening.

It was not clear where the PTV is an attempt to bypass cellphones to win FLO TV adoption, or merely to create a buzz and urgency while waiting for cellphone makers and the Big Two (AT&T and Verizon) to more enthusiastically promote the service.

While they are less about radios and more about mobile devices, the PTV and Snapdragon also reinforce an existing Qualcomm strength dating back to Irwin (and Andy Viterbi’s) earlier company: Linkabit. It is clear that Qualcomm was born (and remains) a systems company, designing things from end to end rather than individual components. Yes, it may partner for other pieces of the value chain, but it can also bring products to market if that’s what it takes (CDMA cellphones, the PTV).

I think this is one area where Qualcomm is quite different than Intel: it is and has always been a systems company, while Intel has spent 30+ years seeking R&D and scale economies from high-volume semiconductor manufacturing. Given their complementary strengths, and overlapping customer base they could conceivably work together.

However, given their size and corporate egos, I think the two companies are destined to remain more competitors than coopetitors. To Qualcomm’s credit, its relations with the third titan in this segment (Nokia) are somewhat better than Intel’s.

Personal note: This was the first time I’ve attended an evening event in San Diego and then flown home afterwards. At the Southwest terminal in Lindbergh, I was relieved to see Modoff and an associate also there after the talk, catching a 9pm flight to SFO as I caught a flight to SJC.

Monday, December 14, 2009

"First" 4G networks

The news Monday reported that TeliaSonera launched “the world’s first fourth-generation wireless service” (as the FT put it) Monday in Stockholm and Oslo.

The statement is untrue, since the industry (including vendors) considers both WiMax and LTE are 4G services, and Sprint rolled out WiMax in 2008, and Clearwire is continuing the WiMax launch across the US. (I’m a bit of a WiMax skeptic, but fair is fair: they did get there first.)

Information Week more accurately calls it “the first LTE deployment”:
The first LTE deployment gives TeliaSonera first-to-market bragging rights as several other global service providers prepare to roll out LTE service. Initial deployments are expected to be limited to laptops with modem cards although handsets with voice capability are expected to be introduced later.
Verizon has been running US trials of LTE and hopes to launch the service next year.

Qualcomm claims patents on both LTE and WiMax. They are likely to upgrade existing W-CDMA clients to LTE, and they are hoping to collect royalties from WiMax as well.

Saturday, December 5, 2009

Odd blast from the past

My Google News watch on Qualcomm today turned up this interesting news story:
Qualcomm Incorporated (NASDAQ:QCOM) Appoints Rich Sulpizio as President and CEO

Ft Lauderdale, Florida 12/05/2009 12:55 AM GMT (TransWorldNews)

Qualcomm Incorporated (NASDAQ:QCOM) is welcoming Rich Sulpizio as its new President and CEO. Mr. Sulpizio has previously served the company as its President and COO. His new responsibilities will include the provision of strategic and operational leadership to grow the company’s market share worldwide.
No, Paul Jacobs isn’t suddenly unemployed: he still has his day job.

Instead, a more accurate account is given here:

Qualcomm Appoints Rich Sulpizio President And CEO Of Qualcomm Enterprise Services
12/2/2009 4:20 PM ET

(RTTNews) - Wednesday, Qualcomm Inc. (QCOM: News ) appointed Rich Sulpizio as president and chief executive officer of Qualcomm Enterprise Services. Sulpizio rejoins Qualcomm with more than 10 years of leadership experience in the Company, including previously serving as Qualcomm's president and chief operating officer. In his new role, Sulpizio will provide strategic and operational leadership to grow QES' market share globally. Sulpizio will succeed Bob Walton, who has decided to look for other opportunities.

Sulpizio most recently served as president of MediaFLO USA Inc., a wholly owned subsidiary of Qualcomm, overseeing the development and deployment of MediaFLO technology, and previously as interim president of Qualcomm China. From 1998 to 2001, he led the Company as president and chief operating officer.

Qualcomm has only had two CEOs, both named Jacobs. However, in 2000-2001, Qualcomm was discussing spinning off the QCT division, with Sulpizio nominated to be CEO of the firm dubbed “Spinco”. In 2000 — as in 2006 — part of the motivation was to avoid giving 3G IP holders a hostage to take in bare-knuckles negotiations over QTL royalties.

Another explanation I heard, however, was that the split would allow Paul Jacobs to become CEO of QTL while the older and more proven Sulpizio would take QCT. Instead, Jacobs fils became CEO of the whole enchilada back in 2005.

I have not had a chance to interview Sulpizio yet. His decision to come back appears unusual, particularly since Paul Jacobs appeared to have cleared out almost any executive associated with his father’s leadership. (CTO Roberto Padovani being a notable exception.)

Certainly I find it encouraging that Sulpizio and Jacobs have overcome whatever natural rivalry they had a year ago — perhaps encouraged by the board, which still includes some faces who worked with Sulpizio in his earlier QCOM stint.